The “energy transition” is increasingly looking like a misnomer. The accelerating shift toward a renewables-powered world starts with the harnessing of energy, with wind and solar production now outmatching oil, gas and coal – and its 150-year infrastructural build-out — on cost but soon to be informing how every industry operates around the planet. A transformation this historic most would agree generically befits the name ‘revolution’.
No more so than in the past several months has this made itself clear. Under the pall of Russia’s devastating invasion of Ukraine and the gas-fuelled energy crisis that has erupted as a direct result, several events have occurred that could well be pivot points for a renewables-led response to the climate crisis — “our Third World War”, as economist Joseph Stiglitz once argued.
In the US, hope – in a post-Trumpian political dystopia – sprung eternal with the House of Representatives’ passage of the Inflation Reduction Act (IRA), an unprecedented $369bn federal spend on climate action. The IRA is designed to supercharge investment in clean-energy construction and would put the US within reach of its Paris Agreement emission reduction pledge. Challenges abound for President Joe Biden, as we have reported, but these do nothing to take the gloss off a plan that would slash greenhouse gases by 50%-plus from the world’s second-biggest polluter.
Much as the climate crisis continues to mount, construction of the 'new industrial ecosystem' is already under way
European policymakers are meanwhile engaged in a rear-guard action against Russian energy politics, turning to the idea of placing a cap on renewable generators – allegedly seeing “revenues they never dreamt of” given current production costs – to help offset current sky-high power prices going into winter, but that view is rightly being called out by industry bodies as a “distortive, ad-hoc intervention” in the market.
What lies ahead for civilization as the world struggles to minimise global heating depends now on speed more than technology. Land- and sea-based wind and solar power will drive the transition with the aid of decentralised grid networks and a global green hydrogen market, but it will be the success or otherwise in decarbonising industry of every sector that will determine our future.
There will be blood on companies’ balance sheets. There will be guerrilla tactics such as Russia’s switch-off “for repair” of Nord Stream 1, a main artery of Europe’s gas supply. There will be propaganda and misinformation from the vested interests in energy’s old guard – with the International Energy Agency’s executive director Fatih Birol compelled to underline in an opinion piece in the FT that it is a “fallacy... that today’s global energy crisis is a clean energy crisis”.
Much as global progress on the energy transition remains embattled, much as the climate crisis continues to mount, construction of the “new industrial ecosystem” is already under way, with companies including most recently China’s Envision that are planning to build hundreds of gigascale wind-and-solar- powered net-zero industrial parks rolling out green steel, aluminium, batteries and other mass production.
As Envision founder Lei Zhang notes: “If you were to look back 100 years [from now] and ask: ‘When did the green industrial revolution start? When the first industrial-scale solar panels were produced? When wind energy had been achieved below fossil fuel? When [lithium ion] batteries had been scaled up to macro level? It is happening faster than we know.”